£ Sterling (Purchasing Value)

HC Deb 21 October 1952 vol 505 cc835-7

7. Lieut.-Colonel Lipton

asked the Chancellor of the Exchequer to what extent the purchasing power of the £ has varied during the past year.

Mr. R. A. Butler

On the basis of the Interim Index of Retail Prices, the internal purchasing power of the £ fell by 1s. 3d., during the year to September, 1952, the latest date for which figures are available.

Lieut.-Colonel Lipton

Is it not clear that there is no hope, or not much hope, of arresting this depression in the value of the £ so long as the fall in production which has taken place since the present Government took office is allowed to continue?

Mr. Butler

On the other hand, there are signs that, except in the case of food prices, which can be attributed to certain action taken last March—[Interruption.]—which I have always openly acknowledged—there are signs that the interim index is going down in certain respects, as the hon. and gallant Member will see from today's newspapers.

Mr. Jay

Does the right hon. Gentleman take comfort from the fact that this fall is due to the deliberate action of the Government?

Mr. Butler

I do not attribute everything to the Government any more than the right hon. Gentleman would attribute everything to himself when he was in office. I will say this, that the rise in the Interim Index of Retail Prices in the first eight months of this year was a good deal less than in the corresponding period of 1951.

Mr. Jay

But is it not a fact that the August index does not take account of the big rise in food prices in the first week of October, and is not that misleading?

Mr. Butler

No, I have no intention of misleading the House, nor the right hon. Gentleman. When the index is next published, it will naturally reflect the increase in food prices which took place in October.

Mr. Jenkins

Will the right hon. Gentleman agree that while there have been price increases in previous years. Britain in those years was always doing better than other countries, whereas this year we appear to be leading the world as far as price increases are concerned, which is a thing that never happened under the late Government?

Mr. Butler

I think that is an oversimplification of the situation. I think that Great Britain is doing pretty well in regard to her balance of payments, considering the burden we are bearing. In that respect, at any rate, Britain is leading the world.

31. Sir I. Fraser

asked the Financial Secretary to the Treasury what, taking 1945 as 20s., was the purchasing power of the £ in November, 1951, and at the latest convenient date.

The Financial Secretary to the Treasury (Mr. John Boyd-Carpenter)

The internal purchasing power of the £ was 14s. 3d. in November, 1951, and 13s. 6d. in September, 1952, based on the National Income White Paper price index for all consumers' goods and services for the period 1945–51, and the Ministry of Labour Interim Index of Retail Prices for the period January to September, 1952.

Dr. King

Is that what the right hon. Gentleman means by "repairing the hole in the £"?

Mr. Boyd-Carpenter

I have nothing to add to the very full answers which my right hon. Friend gave to Questions Nos. 7 and 19.